Dees, J. Gregory : Duke University

J. Gregory Dees is Adjunct Professor of Social Entrepreneurship and Nonprofit Management at Duke University's Fuqua School of Business, and Entrepreneur-in-Residence with the Ewing Marion Kauffman Foundation's Center for Entrepreneurial Leadership. Prior to coming to Duke, he served as the Miriam and Peter Haas Centennial Professor in Public Service at Stanford University's Graduate School of Business where he was the founding codirector of the new Center for Social Innovation.

Emerson, Jed : Stanford University.

Jed Emerson is Senior Fellow, William and Flora Hewlett Foundation, and lecturer at the Center for Social Innovation, Graduate School of Business, Stanford University.



Economy, Peter :

Peter Economy is Associate Editor of Leader to Leader magazine and bestselling author of Leadership Ensemble: Lessons in Collaborative Management from the World's Only Conductorless Orchestra.

Innovation and entrepreneurship are thus needed in society as much as in the economy, in public-service institutions as much as in business. . . . What we need is an entrepreneurial society in which innovation and entrepreneurship are normal, steady, and continuous.

--Peter F. Drucker, Innovation and Entrepreneurship: Practice and Principles

In the ever-renewing society what matures is a system or framework within which continuous innovation, renewal, and rebirth can occur. . . . Renewal is not just innovation and change. It is also the process of bringing the results of change in line with our purposes.

--John W. Gardner, Self-Renewal: The Individual and the Innovative Society

The importance of entrepreneurship and innovation in the social sector has long been acknowledged by leading thinkers. Yet remarkably little has been written on a very practical level specifically to help social sector leaders become more effective social entrepreneurs. If you visit the entrepreneurship or business section of any bookstore, you will find dozens of books to guide business entrepreneurs but few, if any, to guide social entrepreneurs.

This is an embarrassment.

The first book in our two-book series, Enterprising Nonprofits: A Toolkit for Social Entrepreneurs (John Wiley & Sons, Inc., 2001), was designed to fill this gap. But it was just a start; this book takes our work a giant step further. It provides you with strategic frameworks, tools, and concepts to improve your entrepreneurial effectiveness. Both of these books are the fruits of a conversation that started at the Kauffman Foundation's Center for Entrepreneurial Leadership in the spring of 1998. The conversation was about how we could help nonprofit leaders draw on the lessons and tools that have come out of decades of research on business entrepreneurship.

In order for this book to be effective, we knew that it would have to meet several special requirements. It would have to:

• Be grounded in the best thinking about effective entrepreneurship.
• Modify that thinking to make it appropriate for use in the social sector.
• Integrate that thinking with the best ideas about nonprofit management.
• Take a very practical "hands-on" approach.
• Be accessible to readers with no prior business training.

In sum, we decided to produce a down-to-earth toolkit to help social sector leaders hone their entrepreneurial skills and, thereby, serve their social missions even more effectively. We are not trying to turn nonprofits into businesses. Rather, our goal is to help forward-thinking nonprofit leaders learn from business, be more enterprising, and have greater positive, long-term impact in their chosen fields. This is very much a "how-to" book, grounded in research on and experience with entrepreneurs in both sectors.

Before telling you about the content and format of this book, we had better define our subject matter, particularly for those who are not familiar with our work in Enterprising Nonprofits. For us, social entrepreneurship is not about starting a business or becoming more commercial. It is about finding new and better ways to create social value.

Since economist Jean Bapiste Say first coined the word "entrepreneur" some 200 years ago, numerous distinguished and learned people have provided their definitions of the word. If we distill down all the thinking on what makes someone an entrepreneur, however, we would be left with this definition:

Social entrepreneurs are different from business entrepreneurs in many ways. The key difference is that social entrepreneurs set out with an explicit social mission in mind. Their main objective is to make the world a better place. This affects how they measure their success and how they structure their enterprises.

The best measure of success for social entrepreneurs is not how much profit they make but the extent to which they create social value. Social entrepreneurs act as change agents in the social sector by:

• Adopting a mission to create and sustain social value. For social entrepreneurs, the mission of social improvement is critical, and it takes priority over generating profits. Instead of going for the quick fix, social entrepreneurs look for ways to create lasting improvements.



• Recognizing and relentlessly pursuing new opportunities to serve that mission. Where others see problems, entrepreneurs see opportunities. Social entrepreneurs have a vision of how to achieve their goals, and they are determined to make their vision work.



• Engaging in a process of continuous innovation, adaptation, and learning. Social entrepreneurs look for innovative ways to assure that their ventures will have access to needed resources and funding as long as they are creating social value.



• Acting boldly without being limited to resources currently in hand. Social entrepreneurs are skilled at doing more with less and at attracting resources from others. They explore all resource options, from pure philanthropy to the commercial methods of the business sector, but they are not bound by norms and traditions.



• Exhibiting a heightened sense of accountability to the constituencies served and for the outcomes created. Social entrepreneurs take steps to assure they are creating value. They seek to provide real social improvements to their beneficiaries and their communities as well as an attractive social and/or financial return to their investors.

Social entrepreneurs seek out opportunities to improve society and they take action. They attack the underlying causes of problems rather than simply treating symptoms. And, although they may act locally, their actions have the very real potential to stimulate global improvements in their chosen arenas, whether that is education, health care, job training and development, the environment, the arts, or any other social endeavor.

Enterprising Nonprofits offered an essential toolkit that covers the core elements of effective social entrepreneurship. It was designed to engage, challenge, and help even the most experienced readers. It provided readers with a starting point for understanding and applying the core concepts of social entrepreneurship, and it covered a range of core topics including defining your mission, identifying opportunities, mobilizing resources, exercising accountability, managing risks, understanding customers, being innovative, handling your finances, and developing a plan. We supplemented the book with a website to provide you with information about resources and support available to social entrepreneurs. You can find the site directly at www.enterprisingnonprofits.org or through the Kauffman Foundation's EntreWorld website (www.EntreWorld.org). The EntreWorld site serves as a resource for entrepreneurs around the world.

Strategic Tools for Social Entrepreneurs adds more tools to the toolkit offered in Enterprising Nonprofits. The tools in this book focus on a wide range of strategic issues. Part I is entitled "Creating Value and Assessing Performance." Successful social entrepreneurs need strategic vision that has the potential to create greater social value than their competitors create and that will be attractive to collaborators, staff members, board members, funders, and the community being served. We have chapters on each of these areas, closing the section with a chapter on gathering performance information that really matters. You cannot tell whether you are creating value unless you track your performance. Part II is about strategies for "Growing and Exploring New Directions." It tackles two of the most common strategic issues facing enterprising nonprofits: developing viable earned income strategies and deciding how to build on your initial success. It also provides tools for managing the change process that is inherent in social entrepreneurship, particularly when the entrepreneur is operating in an existing organization. We close with a chapter on maintaining an entrepreneurial mind-set as you grow.

This book follows the same format as its predecessor. It has been designed to be used, not just read. Although each author has his or her own style of writing, we required some common elements of style. We wanted to make it easy for you to locate what you need and to apply the relevant ideas to your current situation. Specifically, we have used lots of headings, bullet points, charts, and summaries to make specific topics readily visible. We have even placed icons in the margin to highlight particularly important items.

Our efforts to create a practical and "user-friendly" book went well beyond formatting devices. We urged our authors to use examples and case studies in order to bring their concepts, frameworks, and tools to life. The examples were chosen for their power in illustrating particular key points. But remember: In this context, they are teaching tools, not endorsements of specific organizations. All organizations have their strengths and weaknesses. The examples chosen for this book tend to focus on the strengths and lessons we feel may be of use to you.

Of course, the ultimate value of this book lies in your ability to apply the tools we offer to your own situation and see improved performance as a result. If that does not happen, we have failed. No number of bullet points, icons, or examples will do this for you. You have to do it for yourself, but we can help. At key points in the text, our authors challenge you to put their ideas to the test, and they guide you through the process by offering exercises, checklists, and action steps. Of course, good entrepreneurial management cannot be reduced to formulas or cookbook-style recipes. Our frameworks can point you in the right direction, but you will definitely need to adapt what our authors suggest to your specific situation. Keep in mind that in order to make the material in this book most relevant to your own situation, you may well need to improvise on the themes of a given chapter. Improvisation is consistent with the spirit of entrepreneurship. For every practical tool in this book, our authors have endeavored to provide sufficiently detailed explanations, so that you can improvise on the details while remaining true to the underlying logic of the core ideas. In case our explanations do not go far enough, we have included For Further Reading in the Appendix. The books and articles that you find there give you an opportunity to dig more deeply into the subject matter of each chapter.

Far too many "how-to" and "self-help" books are purchased with good intentions and high spirits but end up sitting on the shelf, unused. We will be deeply disappointed if that is the fate of this book. We have worked hard to make it practical and easy to use. However, if you take what it says seriously, it may require you to change your mind-set, adopt new behaviors, and develop new skills. We hope the process will be fun, and we are confident that it will be rewarding, if you see it through, but we know it will not be easy. Give this book a try and tell us, via our website, how well it works for you. We welcome your suggestions and comments. Besides, all the royalties from the sale of this book and Enterprising Non-profits will flow back to the Kauffman Foundation in order to support work on social entrepreneurship.

We wish you the best in your entrepreneurial endeavor, and remember, fortune favors the prepared mind--so use this book and build learning organizations that will help you achieve your dreams and those of your community. The best is yet to come!

Innovation and entrepreneurship are thus needed in society as much as in the economy, in public-service institutions as much as in business. . . . What we need is an entrepreneurial society in which innovation and entrepreneurship are normal, steady, and continuous.

--Peter F. Drucker, Innovation and Entrepreneurship: Practice and Principles

In the ever-renewing society what matures is a system or framework within which continuous innovation, renewal, and rebirth can occur. . . . Renewal is not just innovation and change. It is also the process of bringing the results of change in line with our purposes.

--John W. Gardner, Self-Renewal: The Individual and the Innovative Society

The importance of entrepreneurship and innovation in the social sector has long been acknowledged by leading thinkers. Yet remarkably little has been written on a very practical level specifically to help social sector leaders become more effective social entrepreneurs. If you visit the entrepreneurship or business section of any bookstore, you will find dozens of books to guide business entrepreneurs but few, if any, to guide social entrepreneurs.

This is an embarrassment.

The first book in our two-book series, Enterprising Nonprofits: A Toolkit for Social Entrepreneurs (John Wiley & Sons, Inc., 2001), was designed to fill this gap. But it was just a start; this book takes our work a giant step further. It provides you with strategic frameworks, tools, and concepts to improve your entrepreneurial effectiveness. Both of these books are the fruits of a conversation that started at the Kauffman Foundation's Center for Entrepreneurial Leadership in the spring of 1998. The conversation was about how we could help nonprofit leaders draw on the lessons and tools that have come out of decades of research on business entrepreneurship.

In order for this book to be effective, we knew that it would have to meet several special requirements. It would have to:

• Be grounded in the best thinking about effective entrepreneurship.
• Modify that thinking to make it appropriate for use in the social sector.
• Integrate that thinking with the best ideas about nonprofit management.
• Take a very practical "hands-on" approach.
• Be accessible to readers with no prior business training.

In sum, we decided to produce a down-to-earth toolkit to help social sector leaders hone their entrepreneurial skills and, thereby, serve their social missions even more effectively. We are not trying to turn nonprofits into businesses. Rather, our goal is to help forward-thinking nonprofit leaders learn from business, be more enterprising, and have greater positive, long-term impact in their chosen fields. This is very much a "how-to" book, grounded in research on and experience with entrepreneurs in both sectors.

Before telling you about the content and format of this book, we had better define our subject matter, particularly for those who are not familiar with our work in Enterprising Nonprofits. For us, social entrepreneurship is not about starting a business or becoming more commercial. It is about finding new and better ways to create social value.

Since economist Jean Bapiste Say first coined the word "entrepreneur" some 200 years ago, numerous distinguished and learned people have provided their definitions of the word. If we distill down all the thinking on what makes someone an entrepreneur, however, we would be left with this definition:

Social entrepreneurs are different from business entrepreneurs in many ways. The key difference is that social entrepreneurs set out with an explicit social mission in mind. Their main objective is to make the world a better place. This affects how they measure their success and how they structure their enterprises.

The best measure of success for social entrepreneurs is not how much profit they make but the extent to which they create social value. Social entrepreneurs act as change agents in the social sector by:

• Adopting a mission to create and sustain social value. For social entrepreneurs, the mission of social improvement is critical, and it takes priority over generating profits. Instead of going for the quick fix, social entrepreneurs look for ways to create lasting improvements.



• Recognizing and relentlessly pursuing new opportunities to serve that mission. Where others see problems, entrepreneurs see opportunities. Social entrepreneurs have a vision of how to achieve their goals, and they are determined to make their vision work.



• Engaging in a process of continuous innovation, adaptation, and learning. Social entrepreneurs look for innovative ways to assure that their ventures will have access to needed resources and funding as long as they are creating social value.



• Acting boldly without being limited to resources currently in hand. Social entrepreneurs are skilled at doing more with less and at attracting resources from others. They explore all resource options, from pure philanthropy to the commercial methods of the business sector, but they are not bound by norms and traditions.



• Exhibiting a heightened sense of accountability to the constituencies served and for the outcomes created. Social entrepreneurs take steps to assure they are creating value. They seek to provide real social improvements to their beneficiaries and their communities as well as an attractive social and/or financial return to their investors.

Social entrepreneurs seek out opportunities to improve society and they take action. They attack the underlying causes of problems rather than simply treating symptoms. And, although they may act locally, their actions have the very real potential to stimulate global improvements in their chosen arenas, whether that is education, health care, job training and development, the environment, the arts, or any other social endeavor.

Enterprising Nonprofits offered an essential toolkit that covers the core elements of effective social entrepreneurship. It was designed to engage, challenge, and help even the most experienced readers. It provided readers with a starting point for understanding and applying the core concepts of social entrepreneurship, and it covered a range of core topics including defining your mission, identifying opportunities, mobilizing resources, exercising accountability, managing risks, understanding customers, being innovative, handling your finances, and developing a plan. We supplemented the book with a website to provide you with information about resources and support available to social entrepreneurs. You can find the site directly at www.enterprisingnonprofits.org or through the Kauffman Foundation's EntreWorld website (www.EntreWorld.org). The EntreWorld site serves as a resource for entrepreneurs around the world.

Strategic Tools for Social Entrepreneurs adds more tools to the toolkit offered in Enterprising Nonprofits. The tools in this book focus on a wide range of strategic issues. Part I is entitled "Creating Value and Assessing Performance." Successful social entrepreneurs need strategic vision that has the potential to create greater social value than their competitors create and that will be attractive to collaborators, staff members, board members, funders, and the community being served. We have chapters on each of these areas, closing the section with a chapter on gathering performance information that really matters. You cannot tell whether you are creating value unless you track your performance. Part II is about strategies for "Growing and Exploring New Directions." It tackles two of the most common strategic issues facing enterprising nonprofits: developing viable earned income strategies and deciding how to build on your initial success. It also provides tools for managing the change process that is inherent in social entrepreneurship, particularly when the entrepreneur is operating in an existing organization. We close with a chapter on maintaining an entrepreneurial mind-set as you grow.

This book follows the same format as its predecessor. It has been designed to be used, not just read. Although each author has his or her own style of writing, we required some common elements of style. We wanted to make it easy for you to locate what you need and to apply the relevant ideas to your current situation. Specifically, we have used lots of headings, bullet points, charts, and summaries to make specific topics readily visible. We have even placed icons in the margin to highlight particularly important items.

Our efforts to create a practical and "user-friendly" book went well beyond formatting devices. We urged our authors to use examples and case studies in order to bring their concepts, frameworks, and tools to life. The examples were chosen for their power in illustrating particular key points. But remember: In this context, they are teaching tools, not endorsements of specific organizations. All organizations have their strengths and weaknesses. The examples chosen for this book tend to focus on the strengths and lessons we feel may be of use to you.

Of course, the ultimate value of this book lies in your ability to apply the tools we offer to your own situation and see improved performance as a result. If that does not happen, we have failed. No number of bullet points, icons, or examples will do this for you. You have to do it for yourself, but we can help. At key points in the text, our authors challenge you to put their ideas to the test, and they guide you through the process by offering exercises, checklists, and action steps. Of course, good entrepreneurial management cannot be reduced to formulas or cookbook-style recipes. Our frameworks can point you in the right direction, but you will definitely need to adapt what our authors suggest to your specific situation. Keep in mind that in order to make the material in this book most relevant to your own situation, you may well need to improvise on the themes of a given chapter. Improvisation is consistent with the spirit of entrepreneurship. For every practical tool in this book, our authors have endeavored to provide sufficiently detailed explanations, so that you can improvise on the details while remaining true to the underlying logic of the core ideas. In case our explanations do not go far enough, we have included For Further Reading in the Appendix. The books and articles that you find there give you an opportunity to dig more deeply into the subject matter of each chapter.

Far too many "how-to" and "self-help" books are purchased with good intentions and high spirits but end up sitting on the shelf, unused. We will be deeply disappointed if that is the fate of this book. We have worked hard to make it practical and easy to use. However, if you take what it says seriously, it may require you to change your mind-set, adopt new behaviors, and develop new skills. We hope the process will be fun, and we are confident that it will be rewarding, if you see it through, but we know it will not be easy. Give this book a try and tell us, via our website, how well it works for you. We welcome your suggestions and comments. Besides, all the royalties from the sale of this book and Enterprising Non-profits will flow back to the Kauffman Foundation in order to support work on social entrepreneurship.

We wish you the best in your entrepreneurial endeavor, and remember, fortune favors the prepared mind--so use this book and build learning organizations that will help you achieve your dreams and those of your community. The best is yet to come!

A complete set of tools for applying entrepreneurial strategies and techniques to your nonprofit

As a follow-up to their book Enterprising Nonprofits, the authors of Strategic Tools for Social Entrepreneurs provide a full set of practical tools for putting the lessons of business entrepreneurship to work in your nonprofit. The book offers hands-on guidance that helps social sector leaders hone their entrepreneurial skills and carry out their social missions more effectively than ever before. This practical and easy-to-use book is filled with examples, exercises, checklists, and action steps that bring the concepts, frameworks, and tools to life. Detailed explanations of all the tools and techniques will help you personalize and apply them to your nonprofit organization�making it stronger, healthier, and better able to serve the needs of our communities.

Foreword.
Preface.
Acknowledgements.
About the Authors.
Editor's Introduction.

PART I: CREATING A STRATEGIC SERVICE VISION.

Chapter 1: Developing a Strategic Service Vision (James L. Heskett).
Chapter 2: Developing an Entrepreneurial Competitive Strategy (Jerry Kitzi).
Chapter 3: Cooperative Strategy: Building Networks, Partnerships, and Alliances (Jerry Kitzi).
Chapter 4: Leading, Retailing, and Rewarding People Entrepreneurially (Peter Economy).
Chapter 5: Managing Your Board Entrepreneurially (Jerry Kitzi).
Chapter 6: Treating Your Donors as Investors (Kay Sprinkel Grace).
Chapter 7: Working with Community.
Chapter 8: Performance Information that Really Performs (Fay Twersky and Jill Blair).

PART II: GROWING AND EXPLORING NEW DIRECTIONS.

Chapter 9: Developing Viable Earned Income Strategies (Beth Battle Anderson, J. Gregory Dees, and Jed Emerson).
Chapter 10: The Question of Scale: Finding an Appropriate Strategy for Building on Your Success (Melissa A. Taylor, J. Gregory Dees, and Jed Emerson).
Chapter 11: Managing Organizational Change (Betty Henderson Wingfield).
Chapter 12: Growing with an Entrepreneurial Mind-Set (Steve Roling).

Appendix.
Index.